SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB
(x) 15, Annual Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (Fee Required) -- For the fiscal year ended December 31, 1996.
( ) 15, Transition Report Under Section 13 or 15 (d) of the Securities
Exchange Act of 1934 (No Fee Required)
Commission file Number 0-10926
TECFIN CORPORATION
(Name of small business issuer in its charter)
Delaware 11-2552239
(State or other jurisdiction of (IRS Employer ID number)
incorporation or organization)
107 Northern Boulevard
Great Neck, N. Y. 11021
(Address of principal executive offices)
Issuer's telephone number - (516) 829-3774
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(9) of the Exchange Act:
Common Stock, $.0001 Par Value
(Title of class)
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes.x.No...
Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB (X)
Issuer's revenues for its most recent fiscal year aggregated $12,152.
An assumed aggregate market value of the Common Stock held by non-affiliates
(33,883,221 shares) has been computed by averaging a bid price
of $.0005 per share with the average of an asked price of $.025 per share
and another asked price of $.02 per share as contained in the "Pink
Sheets" published by the National Quotation Bureau dated March 10, 1997.
Such assumed value is approximately $576,015 (33,883,221 x .017).See also
Item 5 of this Report. The number of outstanding shares of the registrant's
Common Stock, as of March 10, 1997, excluding 285,000 treasury shares,
was 64,205,721.
DOCUMENTS INCORPORATED BY REFERENCE - None
This report consists of pages
PART I
Item 1. DESCRIPTION OF BUSINESS
(a) (b) - Business Development and Business of Issuer.
General - The Company was organized in the State of Delaware on February
23, 1981. During the past three fiscal years of the Company, neither it
nor it's subsidiary (i.e., TecFin Capital Corp. ("Tec Cap") generated
any new business; and, in substance, none of them conducted any meaningful
business opoerations. See also "Management's Discussion and Analysis or Plan
of Operation "elsewhere in this report.
Personnel - Mr. Sanders H. Wallick, in his capacity of Chief Executive
Officer of the Company (and TecCap,) devotes such of his time and efforts to
the business and affairs as he deems necessary. From time to
time the Company employs such clerical and administrative personnel, on
either a full-time or part-time basis as is deemed necessary. As at December
31, 1996, neither the Company nor its subsidiary had any full-time or
part-time employees.
Item 2. DESCRIPTION OF PROPERTY
Since 1993 the Company maintains its office at 107 Northern Boulevard, Great
Neck, New York. The rent is paid by various affiliates of Mr. Sanders H.
Wallick and have permitted and presently continue to permit the Company
to maintain it's offices on the premises at no cost to the Company.
From September, 1984, until December, 1991, the Company was also the
lessee of a one story brick, cinder block and cement block building located
on a 15,000 square foot parcel located at 275 Northern Boulevard, Great
Neck, N. Y. pursuant to a lease expiring on August 31, 1994. The premises
were sub-leased by the Company in December, 1984, for a term expiring
August 30, 1994 at a rental rate above that which it was paying.
As at December 31, 1991, the sub-lessee, Limousine Salon, Inc., was
in default in rent owing to the Company in the amount of approximately
$220,000. As at January 15, 1992, the Company and the owner of the premises
entered into a surrender agreement; and in consideration of such surrender
and the payment by the Company to the landlord of $41,250, the Company was
released of any further obligations under the lease. In May, 1992, the
Company's sub-lessee of the premises concerned confirmed in writing that it
was obligated to the Company in the sum of $261,250 representing the aforesaid
two monetary items and issued a demand note in favor of the Company in
the principal sum of $261,250. During the period May, 1992 and December 31,
1995, payments on account of such note were received by the Company aggregating
$124,767. See also Note 5 of Notes To Consolidated Financial
Statements elsewhere herein. Reference is also made to Item 2 of the
Issuer's Form 8 constituting Amendment No. 1 to its Form 10-K for its
Fiscal Year ended December 31, 1991 for further details concerning the
aforesaid sub-lessee and its default under the referred to sub-lease, and
related information, which Item is incorporated herein by reference.
The Company does not have any assurance that the note will in fact be
paid upon demand or otherwise. It also believes that Limousine Salon, Inc.
does not presently have sufficient assets with which to satisfy any
judgment which may be obtained against it upon the note if litigation were
to be commenced against such entity upon the note.
During the period from April, 1991, through October, 1991, Messrs.
Sanders H. and James R. Wallick were co-venturers with Mr. Vincent Caruso
(a principal of Limousine Salon, Inc.) in a non-related business venture
(i.e., a Mercedes-Benz and BMW new car dealership). Between September,
1991 and June 6, 1994, the Messrs. Wallick were co-venturers with Mr.
Caruso in another non-related business venture (i.e., a Lincoln Mercury new
car dealership), which co-venture relationship terminated in June, 1994.
Item 3. LEGAL PROCEEDINGS.
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCK HOLDER MATTERS.
(a) - Market Information.
The Common Stock of the Company is nominally traded in the over-the-
counter market. Prior to November 14, 1985, such Common Stock was quoted
in the over-the-counter NASDAQ system; but such quotation was terminated on
or about November 13, 1985. While quotations may be available from time to
time from various dealers upon request, and quotations appear from time to
time in the "Pink Sheets" published by the National Quotation Bureau, the
market for the Company's Common Stock does not appear to qualify as an
"established trading market" as such term is defined in Securities and
Exchange Commission regulations. High and low bid prices for the Common
Stock of the Company and average bid and asked prices and prices at which
the stock was actually sold have not been published by recognized sources
since November 13, 1985, and Management of the Company is not aware of
such prices for the quarterly periods within the past two fiscal years
except that: (a) The National Stock Summary Guide, published by the
National Quotation Bureau, indicates that at December 31, 1995, the asked
price of the Company's Common Stock was $.10 per share; (b) the "Pink
Sheets" dated March 10, 1997, contains two quotations for the Company's
Common Stock, one indicates a bid price of $.005 per share and an
asked price of $.025 per share and another an asked price of
$.02 per share; (c) the "Pink Sheets" dated February 29, 1996 and one
indicates only a bid price of $.0001 per share -- and another one indicates
only an asked price of $.10 per share. Generally speaking, the "Pink Sheets"
specified, may not represnt actual transactions.
(b) - Holders - The number of holders of record of the Common Stock of
the Company as of January 25, 1997, was approximately 769.
(c) - Dividends - No dividends on the Common Stock have been paid
since the organization of the Company.
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(The material contained in this Item 6 should be read in conjunction with
the consolidated financial statements of the Company and notes thereto
appearing elsewhere in this report. All computations contained in this
Item are based upon the liquidation basis of accounting.
Results of Operations
Operating revenues for the last two fiscal years were $12,152 (1996)
and $19,700 (1995). Operating expenses which consisted of selling, general
and administrative exzpense amounted to $7,941 for 1996 and $11,515 for 1995.
Net income for 1996 was $4,211 and for 1995 was $7,327. Net earnings per share
were $0 for 1996 and $0 for 1995. The weighted average number of shares
of Common Stock outstanidng at such dates was 64,205,721 in each case.
The Company does not believe the results of operations were significantly
impacted by inflation during the two years ended December 31,1996.
The following table sets forth in detail an analysis of revenues and
expenses as reported in the financial statements contained herein for the
periods indicated, as well as related percentages:
<TABLE>
<CAPTION>
Years Ended December 31.
% 1996 % 1995
= ==== = ====
<S> <C> <C> <C> <C>
REVENUES:
Lease Revenue ------------- $ 39 $ 7,549
Interest Income ----------- 100 $ 12,152 61 $12,151
________ _______
Total Revenues --------- $ 12,152 $19,700
======== =======
EXPENSES: (Including Percentage of Total Revenues)
=========
Cost of Sales --------------- O $ -- O $ --
Other Expenses -------------- 65 $ 7,941 58 $ 11,515
-------- --------
Total Expenses ---------- 65 $ 7,941 58 $ 11,515
======== ========
</TABLE>
Liquidity, Capital Resources and Other Matters Affecting Financial
Condition
As as December 31, 1996, on a liquidation basis: the Company's total
assets (all of which were cash related) aggregated $160,782; the Company's
total liabilities aggregated $21,467; and shareholders' equity aggregated
$139,315. As at December 31, 1995, on a liquidation basis: the Company's
total assets (all of which were cash related) aggregated $156,992; the
Company's total liabilities aggregated $21,888; and shareholders' equity
aggregated $135,104.
As can be seen from the above and the financial statements contained
elsewhere herein, the Company is in a limited liquidity and capital
resources position. Such position is principally due to the defaults
appertaining to (i) two substantial equipment leases which defaults took
place in 1990 and 1991; and (ii) the default in the sub-lease of the
premises 275 Northern Boulevard, Great Neck, NY described under the caption
"Description of Property" elsewhere herein. The lack of new business in
fiscal 1996 and 1995 and cash flow results in such periods are additional
adverse factors that contribute to the Company's present liquidity and
capital resources position; the substantial improvement of which positions
are presently principally dependent upon the realization by the Company of
monies owing to it from the defaulting parties concerned as well as upon
the ability of the Company to generate new and profitable business.
The Company presently does not have any specific plans in mind which
would materially change favorably either (i) its short term or long term
liquidity (i.e., ability to generate adequate amounts of cash to meet its
needs for cash) or (ii) its capital resources position (i.e., source of
funds). Furthermore, there are no trends or events known to Management
that will result in, or that are reasonably likely to result in, the
Company's liquidity increasing in any material way in the foreseeable
future. See also Note 3 of the Notes to Consolidated Financial Statements
elsewhere herein. The present limited liquidity and capital resources
position of the Company will necessarily adversely affect: the financial
condition of the Company; its ability to enter into new lease financing and
brokerage arrangements, which line of business has been the Company's
principal source of revenues since 1986; its prospects for the future; and
its ability to continue in existence. See also Note 3 of the Notes to
Consolidated Financial Statements elsewhere herein.
While Management believes that the Company will be able to continue in
existence during the twelve month period ending December 31, 1997, there
can be no assurance that the Company will be able to generate sufficient
cash to remain in existence thereafter.
ITEM 7. FINANCIAL STATEMENTS.
The information required by Item 7 appears on pages F-1 through F-8
of this Report, which pages follow page 9 of this Report.
The following is an Index to the referred to Financial Statements:
Report of Independent Certified Public Accountants F1
Consolidated Statement of Net Assets - Liquidation Basis
As at December 31, 1996 and 1995 F2
Consolidated Statement of Changes in Net Assets -
Liquidation Basis - For years ended December 31, 1996
1995 and 1994 F3 to F5
Consolidated Statement of Changes in Stockholders's Equity -
Liquidation Basis
For years ended December 31, 1996, 1995 and 1994 F6
Notes to Consolidated Financial Statements F7 to F8
All schedules supporting financial statements are omitted because they
are not applicable or the required information is shown in the financial
statements or notes thereto.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Name
Sanders H. Wallick President and Chairman of the Board
James R. Wallick Vice-President and Director
Business Experience
Mr. Sanders H. Wallick, age 73, has been President and Chief Executive
Officer and Chairman of the Board of the Company since December 15, 1982.
Mr. Wallick has been engaged, as a principal and Chief Executive Officer,
in various areas of the automobile business for more than the 26 years last
past. He is presently, and has been for more than the five years last
past, a principal and President and Chief Executive Officer of each of MIC
Leasing Corp., an automobile leasing company; U.S. Automotive Industries,
Inc., a wholesale dealer in new and used automobiles; and U.S. Auto Imports
& Exports, Inc., a wholesale dealer in new and used automobiles. He is
also presently, and has been since September, 1981, a principal, and an
officer of Apple Chevrolet, Inc., a new car dealer.
Mr. James R. Wallick, age 45, has been a Vice-President and a Director
of the Company since December 15, 1982. Mr. Wallick is the son of Sanders
H. Wallick and has been engaged, as a principal and executive officer, in
various aspects of the automobile business for more than the five years
last past. His principal present activity is that of Chief Executive
Officer of Apple Chevrolet, Inc., a G.M. franchised new car dealer in
Fairlawn, New Jersey, which has been operated by him since its acquisition
in September, 1981. From March, 1980, to September, 1981, he was the Chief
Executive Officer of Brahms Chevrolet, Inc., another G.M. franchised new
car dealer in New Jersey. He also holds interests in each of the entities
set forth above with respect to his father and was actively engaged, as an
executive officer, in each of such entities for more than the five years
Directors are elected at the annual meeting of stockholders and hold
office until the following annual meeting and until his successor is duly
elected and qualified. The most recent annual meeting of stockholders was
held on August 13, 1986. The terms of all officers expire at the annual
meeting of directors following the annual stockholders meeting. Subject to
their contract rights to compensation, if any, officers may be removed at
any time by the Board of Directors.
ITEM 10. EXECUTIVE COMPENSATION.
(a) General
(1)(2) During the past three fiscal years of the Company, no plan or
non-plan compensation was awarded to, earned by, or paid to, any Executive
Officer or Director of the Company for services rendered to the Company and
its subsidiaries in any capacity; during the past three fiscal years, a former
officer and director was paid a total of $15,000 for legal services rendered
to the Company.
(b) Summary Compensation Table
- -- Not Applicable.
(c) Option/SAR Grants Table -- Not Applicable.
id) Aggregated Option/SAR Exercise and Fiscal Year End Option/SAR
Value Table -- Not Applicable.
(e) Long Term Incentive Plan ("LTIP") Awards Table -- Not Applicable.
(f) Compensation of Directors
Directors who are not employees of the Company, or any of its
subsidiaries, are entitled to receive an attendance fee of $300, plus
expenses, for each meeting of the Board attended. There were no formal
meetings of the Board of Directors during the fiscal year ended December
31, 1996, and, accordingly, no attendance fees were paid to anyone.
(g) Employment contracts and termination of employment and change in
control arrangements.
There are no employment agreements in effect with any executive
officer of the Company nor are there in effect any compensatory plan or
arrangement relating to or resulting from the resignation, retirement or
any other termination of such executive officer's employment with the
Company or any of its subsidiaries or from a change in control.
(h) Report on repricing of options/SAR's -- Not Applicable.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a)(b) The following table sets forth certain information as of March 10,
1997, regarding each person known by the Company to own beneficially more
than 5% of the Company's Common Stock, each director of the Company who
owns shares of Common Stock, and all directors and officers of the Company
as a group.
<TABLE>
<CAPTION>
Approximate
Amount and Nature of Percent
Name and Address Beneficial Ownership (1) of Class *
====================== ======================== ===========
<C> <C> <C>
Sanders H. Wallick
107 Northern Boulevard
Great Neck, N. Y. 11021 16,151,250 (2) 25
James R. Wallick
107 Northern Boulevard
Great Neck, N. Y. 11021 14,171,250 (3) 22
All Directors and
Officers as a Group
(2 persons) 30,322,500 47
</TABLE>
* All calculations are based upon 64,205,721 shares outstanding.
(1) Unless otherwise indicated, all shares are directly owned, and the
sole investment and voting power is held, by the persons named.
(2) Represents: 5,113,333 shares which are directly owned and as to which
Mr. S. H. Wallick has the sole investment and voting power and a 50%
interest in 22,075,834 shares held by MIC Leasing Corp. the capital stock
of which is owned 50X by Mr. S. H. Wallick and 50% by Mr. J. R. Wallick.
Messrs. S. H. Wallick and J. R. Wallick can be deemed to equally share the
investment and voting power of the 22,075,834 shares owned by MIC Leasing
Corp.
(3) Represents: 3,133,333 shares which are directly owned and as to which
Mr. J. R. Wallick has the sole investment and voting power and a 50%
interest in 22,075,834 shares held by MIC Leasing Corp. the- capital stock
of which is owned 50% by Mr. S. H. Wallick and 50% by Mr. J. R. Wallick.
Messrs. S. H. Wallick and J. R. Wallick can be deemed to equally share the
investment and voting power of the 22,075,834 shares owned by MIC Leasing
Corp.
(4) Includes 225,000 shares held by wife.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(i) During the fiscal year ended December 31, 1991, the Company
loaned $200,000 to MIC Leasing Corporation, a corporation owned by Messrs.
S. H. and J. Wallick. Such loan was evidenced by demand notes bearing
interest at the rate of 10% per annum and personally endorsed by Mr. S. H.
Wallick. As at December 31, 1996, the amount of such loan still
outstanding was $41,501. See also Note 5 of Notes to Consolidated Financial
Statements elsewhere herein.
(ii) During the fiscal year ended December 31, 1994, the Company
loaned an additional $100,000 to MIC Leasing Corporation. Such loan was
evidenced by a demand note bearing interest at the rate of 8% per annum and
personally guaranteed by Mr. S. H. Wallick. As at December 31, 1996, the
amount of such loan still outstanding was $100,000. See also Note 5 of
Notes to Consolidated Financial Statements elsewhere herein.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a)(1) Financial Statements and Financial Statement Schedules.
A list of the Financial Statements and Financial Statement
Schedules filed as a part of this Report is set forth in Item 7, which
list is incorporated herein by reference.
(a)(2) Exhibits
(3) (a) Certificate of Incorporation of Registrant.(Incorporated
by reference to Exhibit 2(a) of Form S-18 Registration Statement of
Issuer, file # 2-71929-NY).
(b) Amendment to Certificate of Incorporation of Issuer.
(Incorporated by reference to Exhibit 3 to Form 8-K of Issuer for event
of March 31, 1983, file # 2-71929-NY).
(c) By-Laws of Issuer. (Incorporated by reference to
Exhibit 2(b) of Form S-18 Registration Statement of Issuer, file # 2-
71929-NY).
11. Statement re computation of per share earnings. (Included in
Note 1 of Notes To Consolidated Financial Statements)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the
period covered by this report.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant has caused this report to be signed on its behalf by the
undersigned "hereunto duly authorized.
TECFIN CORPORATION
By: s/ Sanders H. Wallick
Sanders H. Wallick
March 30, 1997 President and Chairman
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
s/Sanders H. Wallick
____________________
(Sanders H. Wallick) Chairman of the Board March 30,1997
(Chief Executive officer
and acting principal
financial and accounting
officer)
s/ James R. Wallick
____________________
(James R. Wallick) Director March 30,1997
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
TecFin Corporation
We have audited the accompanying consolidated statements of net assets
(liquidation basis) of TecFin Corporation as at December 31, 1996 and 1996,
and the related consolidated statements of changes in net assets
(liquidation basis) and the consolidated statements of changes in
stockholders equity (liquidation basis) for the years ended December
31, 1996, 1995 and 1994. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these consolidated financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall consolidated financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As described in Note 1, the Company's consolidated financial statements have
been prepared on the liquidation basis of accounting.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the net assets in liquidation of
TecFin Corporation as at December 31, 1996 and 1995, and the changes in net
assets in liquidation for the years ended December 31, 1996, 1995 and 1994,
in conformity with generally accepted accounting principles.
The Company plans to use the proceeds of the sale of its assets to satisfy its
obligations. It is not presently determinable whether the amounts realizable
from the disposition of the assets will differ materially from the amounts
shown in the consolidated financial statements.
New York, N. Y.
February 12, 1997
TECFIN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET ASSETS
(Liquidation Basis)
A S S E T S
(Note 1)
December 31,
1996 1995
Cash $ 19.281 $ 15,491
Demand notes receivable -
related party (Note 5) 141,501 141,501
-------- ---------
160,782 156,992
-------- ---------
L I A B I L I T I E S
Liabilities:
Income taxes payable $ 505 $ 926
Accrued expenses and other
current liabilities 20,962 20,962
-------- --------
Total liabilities 21,467 21,888
-------- --------
Net assets $139,315 $135.104
========= ========
See notes to consolidated financial statements.
TECFIN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
(Liquidation Basis)
FOR THE YEAR ENDED DECEMBER 31, 1996
(Note 1)
Net assets as of January 1, 1996 $135,104
Sales and operating revenues (Note 5) $12,152
Cost and expenses:
Selling, general and administrative 7,941
-------
Income from operations 4.211
Provision for taxes (Note 4) -
-------
Net income 4.211
--------
Net assets as of December 31, 1996 $139,315
========
Earnings per share (Note 2):
Weighted average number of
common shares outstanding 64,205,721
==========
Income per common share $ -
========
See notes to consolidated financial statements.
TECFIN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
(Liquidation Basis)
FOR THE YEAR ENDED DECEMBER 31, 1995
(Note 1)
Net assets as of January 1, 1995 $127,777
Sales and operating revenues (Note 5) $19,700
Cost and expenses:
Selling, general and administrative 11,515
-------
Income from operations 8,185
Provision for taxes (Note 4) 858
-------
Net income 7,327
--------
Net assets as of December 31, 1995 $135,104
========
Earnings per share (Note 2):
Weighted average number of
common shares outstanding 64,205,721
============
Income per common share $ -
========
See notes to consolidated financial statements.
TECFIN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
(Liquidation Basis)
FOR THE YEAR ENDED DECEMBER 31, 1994
(Note 1)
Net assets as of January 1, 1994 $ 32,835
Sales and operating revenues (Note 5) $12,272
Cost and expenses:
Selling, general and administrative $13,810
Bad debt recovery (Note 5) ( 97,767)
-------
(83,957)
--------
Income from operations 96,229
Provision for taxes (Note 4) 1,287
-------
Net income 94,942
--------
Net assets as of December 31, 1994 $127,777
========
Earnings per share (Note 2):
Weighted average number of
common shares outstanding 64,205,721
==========
Income per common share $ -
===========
See notes to consolidated financial statements.
TECFIN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 1 - BASIS OF PRESENTATION.
The accompanying consolidated financial statements
have been prepared on the assumption of the liquidation basis of accounting
in accordance with Section 607.02 of the Codification of Financial Reporting
Policies adopted by the Securities and Exchange Commission. The consolidated
statement of net assets (liquidation basis) does not distinguish between
current and long-term balances, as would be reflected if such statement
had been prepared on the assumption of going concern.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
(a) Principles of Consolidation:
The accompanying consolidated financial statements
include the accounts of TecFin Corporation and its wholly-owned subsidiaries.
All intercompany accounts and transactions have been eliminated in
consolidation.
(b) Earnings Per Share:
Primary income per share is based on the weighted
average number of shares outstanding during each year.
(c) Liquidation Basis:
The accompanying consolidated financial statements
reflect the adoption of a liquidation basis accounting effective January 1,
1992.
NOTE 3 - THE COMPANY.
The Company suffered a significant net loss during
1991, lacks any new business now or in the foreseeable future and at present,
management of the Company does not have any viable plan for the future to meet
its short-term or long-term liquidity needs. The Company has not adopted a
formal plan of liquidation. However, in the opinion of management, existing
assets should be sufficient to extinguish existing liabilities.
NOTE 4 - PROVISION FOR INCOME TAXES.
The provision for income tax expense varies from the
federal statutory rate as follows:
<TABLE>
<CAPTION>
For the Years Ended
December 31,
1 9 9 6 1 9 9 5 1 9 9 4
<S> <C> <C> <C>
Federal statutory rate $1,432 34.0% $2,783 34.0% $32,717 34.0%
State and local income taxes
net of federal tax benefit - - ( 566) ( 7.5) ( 850) ( 0.9)
Effect of net operating loss
not available for carryback ( 1,432) (34.0) (1,359) (16.6) (30,580) (31.8)
------- ----- ----- ---- ------ ----
Provision for income taxes $ - - % $ 858 9.9% $1,287 1.3%
======= ===== ===== ==== ====== ====
</TABLE>
At December 31, 1996, the Company has a net operating
loss carryforward of approximately $873,000, which can be applied to reduce
future taxable income through December 31, 2004.
NOTE 5 - RELATED PARTY TRANSACTIONS.
In November 1991, the Company loaned $200,000 to
M.I.C. Leasing Corp. which are demand notes bearing interest at 10%. In
addition, on June 6, 1994, the Company loaned an additional $100,000 to M.I.C.
Leasing Corp., which is a demand note bearing interest at 8%. At December
31, 1995 and 1994, the Company was owed $141,501 in each year from the
demand notes. The interest income earned from these notes were $12,152,
$12,152 and $9,046, respectively for the years ended December 31, 1996, 1995
and 1994.
In May 1992, the Company received a non-interest
bearing demand promissory note from a sublessee of commercial space. An
officer of the Company and the sublessee were partners in an unrelated joint
venture. The face value of the non-interest bearing demand note is $261,250,
which was present value to $171,250 using an imputed interest rate of 11.42%.
The consolidated financial statements were prepared on liquidation basis at
December 31, 1991 and the aforementioned note of $261,250 was written off due
to no security, collateral or personal guarantees. For the year ended
December 31, 1994, the Company collected $97,767, which is reflected in the
financial statements as bad debt recovery.
TECFIN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Liquidation Basis)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(Note 1)
<TABLE>
<CAPTION>
Common Stock Additional Treasury Stock Total
------------------ Paid-In Accumulated --------------- Stockholders'
Shares Amount Capital Deficit Shares Amount Equity
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1994 64,490,721 $6,449 $1,079,170 ($1,050,009) 285,000 ($2,775) $ 32,835
Net income for the year ended
December 31, 1994 - - - 94,942 - - 94,942
------------ ------ ----------- ------------ ------- ------- --------
Balance at December 31, 1994 64,490,721 6,449 1,079,170 ( 995,067) 285,000 ( 2,775) 127,777
Net income for the year ended
December 31, 1995 - - - 7,327 - ( 2,775) 7,327
------------ ------ ----------- ------------ ------- ------- --------
Balance at December 31, 1995 64,490,721 6,449 1,079,170 ( 947,740) 285,000 ( 2,775) 135,104
Net income for the year ended
December 31, 1996 - - - 4,211 - - 4,211
---------- ------ ---------- ------------ ------- --------- --------
Balance at December 31, 1996 64,490,721 $6,449 $1,079,170 ($ 943,529) 285,000 ($2,775) $139,315
========== ====== =========== ============ ======= ======== ========
</TABLE>
See notes to consolidated financial statements.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 19,281
<SECURITIES> 0
<RECEIVABLES> 141,501
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 160,782
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 160,782
<CURRENT-LIABILITIES> 21,467
<BONDS> 0
<COMMON> 1,000
0
0
<OTHER-SE> 138,315
<TOTAL-LIABILITY-AND-EQUITY> 160,782
<SALES> 12,152
<TOTAL-REVENUES> 12,152
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,941
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,211
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,211
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,211
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
